IOC, BPCL and HPCL currently sell petrol at a loss of Rs 6.12 per litre, Rs 4.60 a litre on diesel, Rs 18.42 per litre on PDS kerosene and Rs 265.27 per 14.2-kg LPG cylinder.
Upstream oil firms bear one-third of the revenue that retailers lose on selling diesel, domestic LPG and Kerosene at government-controlled rates.
The country's biggest fuel retailer Indian Oil Corporation on Wednesday said it is losing Rs 107 crore (Rs 1.07 billion) a day on selling auto and cooking fuel below cost even as it awaits the government to announce clear compensation package.
Minister of state for petroleum and natural gas Jitin Prasada in a written reply to a question in the Lok Sabha said the finance ministry is yet to approve the oil bonds. Indian Oil, Bharat Petroleum and Hindustan Petroleum lost Rs 11,853 crore (Rs 118.53 billion) in revenues on not being allowed to raise LPG and kerosene prices in line with the cost during April- September.
The government may further reduce petrol, diesel and domestic LPG prices just before the General Elections are announced in February, a senior official said.
State-run Indian Oil Corp is losing Rs 92 crore (Rs 920 million) per day on sale of petrol, diesel, domestic LPG and kerosene as government has not allowed it to revise rates in line with firming international oil prices.
Indian Oil Corporation sought an increase in prices of petrol, diesel, domestic LPG and PDS kerosene on Tuesday as spiralling global oil prices had put "enormous" burden and may result in a revenue loss of over Rs 8,500 crore (Rs 85 billion) this fiscal. While the government and oil companies were bearing their share of the burden, the consumers have so far been spared from any hike in fuel prices despite crude oil touching a historic high of $93 per barrel.
The increase in petrol price, which the oil firms had been holding since January even though crude oil had touched a two-and-a-half-year high, came a day after election results of five state assemblies were announced.
The government should end subsidised domestic cooking gas (LPG) for people with income of more than Rs 6 lakh per annum, a Parliamentary Panel has suggested.
Congress president and United Progressive Alliance Chairperson Sonia Gandhi has directed all party-ruled states to subsidise three additional cylinders a year for domestic liquefied petroleum gas, raising the cap on subsidised cylinders from six to nine.
Public sector oil firms have seen losses on fuel sale widening to about Rs 170 crore (Rs 1.7 billion) per day on firming international oil prices and may end the fiscal with over Rs 49,000 crore (Rs 490 billion) in revenue loss.
The firms were till last month selling diesel at a profit of 32 paise a litre, which helped them partly neutralise the losses on the sale of petrol, domestic LPG and kerosene. But from Monday, IOC, BPCL and HPCL are at breakeven on diesel while they lose Rs 3.68 a litre on petrol, Rs 69.49 per 14.2-kg LPG cylinder and Rs 12.65 on every litre of kerosene, industry sources said.
With Indian Oil, Hindustan Petroleum and Bharat Petroleum projected to lose Rs 200,000 crore (Rs 2,000 billion) in revenues on sale of petrol, diesel, domestic LPG and kerosene below import cost, industry sources said a hike in the range of Rs 2 to 5 per litre appears on the cards.
The petroleum ministry has sought additional oil bonds worth about Rs 13,000 crore (Rs 130 billion) to cover the revenue loss on fuel sale in the fourth quarter of the current fiscal.
The fall in international oil prices has resulted in handsome margins for state-owned firms on petrol and diesel sales, but not all of it would be reflected in the cut in the retail selling price, as Finance Ministry wants to take away some of the gain by raising excise duty.
Nearly 30 per cent of petrol pumps in Delhi and about 100 in Mumbai went without petrol and diesel, while there is a minimum 7-day wait period for delivery of domestic LPG gas. Meanwhile, after Delhi and Assam, Gujarat, Rajasthan, Uttar Pradesh and Maharashtra invoked ESMA to ensure uninterrupted fuel supplies.
With the assembly polls in major states concluding, the government may slash petrol price next week by Rs 10 a litre, diesel by Rs 3 per litre and domestic LPG by Rs 20 per cylinder in line with fall in global oil prices.
A price reduction may be considered if crude oil falls to $61 per barrel, he said. The basket of crude oil India buys was at this year's lowest of $68.81 per barrel. Indian Oil, Bharat Petroleum and Hindustan Petroleum are currently losing about Rs 280 crore (Rs 2.8 billion) per day on sale of petrol, diesel, domestic LPG and kerosene as government has not allowed them to align retail prices with cost of production.
Last month, Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum were losing Rs 390 crore (Rs 3.9 billion) per day on sale of petrol, diesel, kerosene and domestic LPG. This month, losses have come down to Rs 352 crore (Rs 3.52 billion) per day, an industry official said.
The average price of Indian basket of crude oil during 2007-08 (upto August) has increased to $68.34 per barrel as compared to 62.46 dollars a barrel during 2006-07.
The LPG model was launched a fortnight ago. Chevrolet is now hoping to rev up the car's sales with a diesel option in June.
Petrol, that had in April/May witnessed 11-12 per cent growth in consumption, in fact saw a six per cent fall in demand at 8,02,500 tons in June, oil ministry officials said.
The relentless rise in international oil prices that last week touched an all time high of $135 a barrel has forced the government to mull options to save state-run firms, which expect a revenue loss of Rs 200,000 crore (Rs 2000 billion) this fiscal on sale of petrol, diesel, domestic LPG and kerosene.
Reliance Industries on Friday dubbed as a "canard" allegations that the near-doubling of natural gas prices will lead to a similar hike in domestic cooking gas (LPG) and inflation in food item rates.
Indian Oil Corp, the nation's largest oil firm, today said it is losing Rs 320 crore (Rs 3.20 billion) a day on fuel sales and may see future projects getting impacted if the current situations continues in 2009. "We are losing about Rs 320 crore a day on sale of petrol, diesel, domestic LPG and PDS kerosene," IOC Chairman Sarthak Behuria told reporters on the sidelines of 5th Asia Gas Partnership Summit in New Delhi.
Petroleum Minister Murli Deora is likely to meet Finance Minister P Chidambaram later this week to seek greater compensation for oil companies, who are currently losing about Rs 450 crore (Rs 4.5 billion) a day on fuel sales. Indian Oil, Bharat Petroleum and Hindustan Petroleum are likely to see doubling of revenue loss on sale of petrol, diesel, domestic LPG and PDS kerosene to Rs 150,000 crore. The three fuel retailers together lost Rs 77,304.50 cr on fuel sale in 2007-08.
The new system will entail a periodic revision in the price of subsidised LPG cylinders so that the subsidy remains fixed.
The Group of Ministers are scheduled to meet this month to decide upon the issue of petro price system.
State-run retailers IOC, BPCL and HPCL may lose about Rs 45,000 crore (Rs 450 billion) on selling auto and cooking fuels below cost this fiscal, two-third of which will be compensated by the government by issuing bonds.
"Petroleum Ministry has moved a Cabinet note for raising fuel prices but a decision will depend on what allies of the ruling alliance say," an official said.
IOC and sister PSUs Bharat Petroleum and Hindustan Petroleum are losing Rs 4.60 on sale of every litre of petrol and Rs 2.33 per litre of diesel currently, IOC director (marketing) G C Dagga told reporters in New Delhi.
Petroleum Minister Murli Deora on Tuesday said petrol and diesel prices will not be increased "as of now" even as he began consultations with Finance Minister P Chidambaram on ways of mitigating the spurt in global oil prices.
Three oil PSUs have moved the Supreme Court seeking modification of its earlier order that Aadhaar card is not mandatory and no person should suffer for want of it in getting benefits of government schemes.
55 million people already in the social security net
Close on the heels of steep increase in diesel price and cap on supply of subsidised LPG, President Pranab Mukherjee on Monday said greater alignment of domestic rates with global prices was in the interest of both consumers and investors.
The government does not seem inclined, at least in the petroleum sector, to effect sudden and steep upward price revisions to tame its huge subsidy burden and rein in fiscal deficit.
Describing DBT for LPG as a 'tremendous success,' Oil Minister M Veerappa Moily said the programme, when implemented throughout the country, would help save Rs 8,000-9,000 crore (Rs 80-90 billion) of subsidy from going to unintended beneficiaries.
Government has begun drawing contingency plans to avert any shortage of domestic cooking gas as a result of go-slow agitation by employees of the country's largest oil company Indian Oil Corp.
OMCs are currently incurring daily under-recovery of Rs 230 crore.
A bench headed by Chief Justice P Sathasivam said that the plea of the Centre would be taken up for hearing on October 8.
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